JustFab looks to shake bad press, angry customers

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Dive Brief:

JustFab Inc., owner of Kate Hudson’s athleisure company Fabletics, addressed the intense scrutiny it has been seeing recently with a post from corporate marketing officer Shawn Gold on Medium Tuesday. The post let customers and observers know that the company is ready to do something about its angry customers.

The company has faced accusations from customers and consumer watchdog groups that it deceives shoppers with monthly subscriptions that are hard to cancel. More than a thousand customer complaints about the company have been submitted to the Better Business Bureau and the Federal Trade Commission, BuzzFeed reported.

Last year, the retailer settled a consumer protection lawsuit in California for $1.8 million, and has been the target of consumer advocacy groups such as Truth in Advertising. The company’s tactics may also run afoul of British law, according to news reports this spring.

Dive Insight:

The complaints against JustFab are centered around its $39.95-per-month "VIP Membership" program and the fact that customers say the site does not give them sufficient warning that they are signing up for an ongoing monthly payment when buying merchandise. The subscription can only be canceled over the phone instead of online or via e-mail.

In the past, JustFab co-CEO Adam Goldenberg has linked the many issues the company has faced to its fast growth: The retailer was founded in 2010 and will swell to $500 million in sales this year.

Last year JustFab said it was hiring a third-party auditor to evaluate its customer service systems with plans to release those findings to the public, and that it would look into whether it could make it possible to unsubscribe online. Tuesday’s Medium missive from Gold, who arrived at JustFab three months ago, seems at first to be that public announcement. But, read on and there’s no mention of a third-party audit. A company spokesperson who asked not to be named reached out to Retail Dive to say that an audit is indeed being completed now and that its findings will be released some time this summer. She declined to say what company is conducting that audit.

Gold admitted that the company at times didn’t provide the level of customer service it should, and noted that it had made moves to clarify its membership provisions. But he also reiterated that the number of dissatisfied customers was low and that the company’s membership policies were clear.

"Like I said before, there will always be haters. But most of the people who complained were simply frustrated," Gold wrote in Medium. "Understandably so. Maybe they didn’t see the notifications. Maybe they couldn’t easily get through to customer service."

The biggest change to address these customer complaints, according to Retail Dive's spin through the order and checkout process Wednesday, appears to be a note at checkout that warns shoppers that they are signing up for a subscription service, urging them to “cancel at anytime by calling 1-844-Fabletics.” Gold also said in the post that the company is adding video notifications to alert people of the subscription signup.

Gold says that the company is still working on a way to cancel its VIP memberships online, and that it should be available in "the next few weeks." The company spokesperson told Retail Dive that JustFab has been testing online cancellations, has seen a good response, and will indeed be rolling out the option across all brands in the next couple of weeks.

“I heard stories about how they are reimagining the fashion business by using data and customer feedback to reinvent how clothes are designed,” Gold says of his conversations with employees. “They told me how they are changing the way customer service people are treated inside a company, in turn, changing the way customers are treated. And I heard about how groups within the company collaborate unlike any fashion company ever has or could.”